At the risk of asking an obvious question, are you up for shipping the junk you have at home and having it stored and sold by someone else?
If yes, then Fulfillment by Amazon (FBA) may be the perfect program for you.
FBA is a bit like Ebay except that, unlike Ebay, you can ship your inventory to a distribution center and have Amazon store, sell and ship it.
Plus, Amazon’s customer service department will deal with pesky issues like refunds or exchanges on your behalf. This simplifies your life and gives you just one challenge to overcome: finding inventory.
How can you start selling through Amazon?
How to Become an Amazon Seller in 5 Steps
I’ve broken down the steps you need to take to become an Amazon Seller below. You’ll be surprised at just how easy it is to get your goods listed.
You only need to fill out a few forms to get started.
1. Create your Amazon Seller Account
First, setup an Amazon seller account.
For the time being, you can select the option to ‘Sell as an Individual’ and avoid the monthly fee, especially if you’re just getting started.
As an individual, you’ll pay a flat rate of $0.99 per item sold and no monthly fees.
This is good for getting your feet wet while saving a few bucks. You’ll be able to try out FBA before making a monthly commitment.
Professional accounts come with a $40/month fee but no charge per item sold. The professional level also unlocks more categories and more features.
If you are planning on listing more than 40 items initially, it becomes more cost effective to sell as a professional. For now, just work as an individual.
Next, add FBA to your seller account.
2. Round Up The Goods You Want to Sell
Round up your ‘valuable goods’ and, if possible, pack them up into individual boxes.
Doing so will prepare you for the next step, which is setting up and managing where your shipped stuff will live on Amazon.
If for some reason you don’t have anything to sell yet, check out my guide on products you can buy cheap and sell high. You’ll essentially be starting your own retail arbitrage business by going this route.
3. Start Listing Your Products
Sign in at Amazon Seller Central and go to the Inventory menu.
Choose to ‘Add a listing.’
Because Amazon stores and tracks inventory in marked boxes, you will also need to create a new box for each individual box you send.
Hopefully, your inventory items will have easily identifiable codes like a UPC or ISSN, but if not, you can also search on an identical item using Amazon’s search function. When you find a match, click ‘Sell Yours.’
After adding some product descriptors, be sure to check off that the item is going to be sold through FBA. Also, you should switch from the default Individual to Case-Packed Items mode. Why?
You will inevitably be shipping multiple identical items of something (e.g., DVDs), and you will want Amazon to track these multiple items separately.
FBA does this by assigning cases. For example, if you have only one DVD to ship, you’d mark it as 1 unit (i.e., article type) per case and 1 number per case. But if you have three of the same DVD to ship, you’d mark them as 1 unit per case and 3 numbers per case.
Keep hitting ‘Add a Listing’ until all your boxed items are cataloged.
4. Prepare Your Products for Shipment to Amazon
Now, click ‘Work on Shipment.’
This will allow you to create and print shipping labels for your box(es). Choose SPD (small parcel delivery) as your shipping option unless your boxed items weigh over 150 lbs.
The other options are LTL (Less-Than-Truckload) and FTL (Full Truckload), and hopefully you won’t need to worry about these massive haul options for now.
Select UPS as your carrier because it partners with Amazon; in other words, using UPS gives you a shipping discount.
Now you can start printing out your packing slips and shipping labels.
To this end, it helps if you have an at-home scale that will immediately weigh your boxes. If not, you can input the dimensions of your box(es) online and have it weighed out at your local UPS. Just be sure you eventually print out your labels using FBA and not your local UPS- Amazon’s reduced shipping rates will amaze you (sorry about the pun).
5. Collect Your Paycheck
Finally! The reason why you’ve gone through all this trouble: the paychecks!
Once you’ve mailed your box(es), you can track your shipments, and eventually your unpacked inventory, via Amazon.
Amazon will notify you when your products sell and will directly deposit the money right into your bank account. Time to sit back and let the money roll in.
There might be an Amazon App for that
Not all of us are blessed with a smartphone, but if you do have one, you can easily scan your goods and determine their immediate value using either an iOS or Android-based price checker Amazon app on your smartphone.
This is useful if you’re dealing with a lot of inventory or prone to checking out store clearance sales for additional merchandise.
One free iPhone-based Amazon app is Amazon Seller. This app really is the best app for sellers just getting started as there is no charge and it connects directly with your Amazon account. The Selling Family put together a free guide to show you how the Amazon Seller app works.
Some things to keep in mind about FBA
1. You pay for shipping. As hinted at above, you are responsible for your own shipping charges to Amazon. This is something to keep in mind as you’re considering packing away Grandma’s 50’s era glassware or your priceless 8-track collection.
2. Seller fees. Amazon still takes about a 15% cut on all your sales through FBA. If you can sell your items more profitably through a garage sale or private listing on Ebay, then do so.
3. Additional fees. Amazon has a fee schedule for item pickup (basically, anytime Amazon employees must handle your product to stock or ship it) and storage as well as weight-based fees for item shipping. Nothing is free here. Amazon also recently instituted a Long Term Storage fee for items stored longer than one year.
4. Co-mingling issues. Because Amazon has numerous distribution centers, it uses the distribution center located closest to the customer when shipping product. As a result, the product you end up selling may not actually be your own if you agree to co-mingle your merchandise. This can happen easily if, say, you are selling a DVD or book that another Amazon seller may also have listed.
The advantage of using co-mingling is that you sell more of your stuff faster. The disadvantage is that you can’t exactly vouch for the quality and legality of another seller’s merchandise. This can lead to problems or even Amazon account closure because of pirated goods.
5. Sales tax. You may live in a state that requires you to report your sales tax (e.g., Missouri). Alternately, your items might be shipped off to a state that charges sales tax. However, when you work with FBA, you have no good way of knowing which warehouse is stocking your items (especially if you’re comingling) and to which state(s) they are being shipped. While most state ecommerce tax collection has not been aggressively enforced, it may become so in the future.
6. Competition. With FBA, you’re not just competing with other third-party merchants on price and selection, you’re also competing with Amazon itself. This is possibly the biggest strike against FBA versus a selling service like Ebay or Etsy. Definitely check Amazon prices for comparable goods before sending your own stuff to FBA.
The Best Training Course We’ve Found
Amazon Boot Camp is ideal for anyone who wants to leverage the power of Amazon and grow a significant side hustle quickly.
The course was created by Jessica Larrew who was able to quickly go from zero to six-figures in yearly profit while working part time hours with her husband.
The Amazon Boot Camp takes you through the whole process of using the Retail Arbitrage method to grow an Amazon FBA business. Jessica walks you through everything from setting up your Amazon seller account, scanning apps, finding products and getting them to Amazon.
Not ready to sign up for a full course just yet? You can do their 7-day free email course. The email course will help you decide if this is the perfect business model for you.
Selling through FBA: Worth It?
With all the fees and other issues outlined above, you may be wondering if you can cut some kind of profit margin with FBA. Luckily, Amazon provides an FBA Revenue Calculator that allows you to determine if FBA is even worth it.
Also, as stated previously, you should look into other selling services, including doing a simple garage or estate sale, to get rid of your excess ‘treasure.’
On the other hand, if you can find lots of lightweight inventory cheaply and easily via clearance sales, store closeouts or even inheritance, then FBA may be a smart solution for you.
If you are looking for a few more success stories, check out how Marvin grew an Amazon FBA business to 10k/month in less than 4 months or how this family travels full time in an RV while making a living selling on Amazon.
I did round up some of the best selling products on Amazon if you want some ideas on what sells and what doesn’t.